Policy instruments (2) - Transport Policy and Planning in Great Britain - page 209

have it) rather than giving an extra slot to the then franchise-holder GNER. The
decision removed an opportunity for GNER to generate additional revenue and meant
a significant shortfall in the planned premium payment received by the Treasury.
In awarding rail passenger franchises (DfT), London bus service licenses (TfL) or
tendered bus service contracts (PTEs and local authorities), these public bodies have
to provide for fair competition between bidders. This means that the service levels
being sought (and any associated features such as vehicle standards) have to be clearly
specified in a way that does not discriminate against any particular bidder and are not
a matter for private negotiation.
13.4 Rail regulation
The regulatory arrangements under which the national railway network operates
remain basically the same as when it was privatised, although the policy context in
which they function has altered radically.
The Office of the Rail Regulator (ORR) is a non-departmental public body with
Board members appointed by the Secretary of State DfT. It was established to regulate
companies within the privatised railways industry and in particular the owner of the
national network infrastructure (now Network Rail) which has a monopoly position.
Except for this all other parts of the industry were broken up and expected to operate
in competition.
Under the Railways Act 1993 ORR's main functions are:
• to licence network providers (primarily Network Rail), train and station operators
and to monitor compliance with the terms of these licences
• to determine the access charges payable for use of network facilities
• to issue directions on proposals for access to network facilities
• to promote the efficient functioning of the railway (e.g. through the development
of model clauses for inclusion in contracts within the industry).
To these original responsibilities have been added:
• to promote and monitor compliance with health and safety standards (formerly
undertaken by the Railways Inspectorate within the Health and Safety Executive)
• to evaluate applications for closure of lines, stations or passenger services.
Although ORR is required to 'contribute to the achievement of sustainable
development' and to 'have regard to the effects on the environment of railway activities'
it is important to recognise that rail regulation itself was not conceived as part of what
would now be termed a 'sustainable transport strategy' (Shaw and Farrington 2003) .
Action to this end only came about later under New Labour with the establishment of
the Strategic Rail Authority (SRA).
To ensure provision for 'minimum passenger requirements', franchises are let
through government-funded contracts. In England these are now let by DfT. The
franchise for services in Scotland is determined by the Scottish Executive and in Wales
by the Welsh Assembly jointly with DfT. Responsibility for franchising the 'Merseyrail
Electrics' and the North London line group of local services has been devolved to
Merseytravel (Merseyside PTE) and TfL respectively . Franchised operators are able
to offer commercial services above the minimum specified but have to abide by